The effect of system configuration and ramp-up time on manufacturing system acquisition under uncertain demand

The increasing frequency of new product introductions force today's companies to continuously upgrade their production capacities and system configuration. The frequent revision of production capacities and the capacity loss during this period increase the importance of ramp up duration in evaluating capacity investments. This paper aims to explore how a firm should optimally allocate its capacity investments among Dedicated Manufacturing Systems (DMS) and Reconfigurable Manufacturing Systems (RMS), considering the capacity evolution in ramp up period. We propose a mixed integer programming model that grasps various ramp up time patterns and takes into account RMS and DMS scalability lead time. We aim to see how capacity is allocated to RMS and DMS based on system cost, system responsiveness, and reconfiguration speed.